Oil and gas are vital for transport and heating, but also underpin the entire industrial supply chain, affecting food production, plastics, chemicals and agriculture. And that doesn’t include shortfalls in other resources caused by the closing of the strait, including fertilizer and helium, which is used in the manufacturing of microchips.

So far, the damage to European consumers has been confined primarily to the price at the pump (and a hike in the cost of new PlayStations that Sony has attributed to “pressures in the global economic landscape”).

POLITICO outlines the risks facing the European economy should what Fatih Birol — the executive director of the International Energy Agency — has described as “the greatest threat to global energy security in history” persist.

Unlike previous crises — chiefly the oil shock that followed the OPEC oil embargo in 1973 and the gas shock that followed Russia’s invasion of Ukraine in 2022 — the current panic affects all energy supplies equally, ranging from crude oil and natural gas to refined products like jet fuel and diesel.

“Markets are now grappling with a scenario long discussed in theory but rarely thought of as a legitimate possibility — the effective shutdown of the world's most critical energy chokepoint,” said Ana Maria Jaller-Makarewicz, lead energy analyst for the Europe team at the Institute for Energy Economics and Financial Analysis. While the 1970s crises knocked out 7 percent of global supplies, she said, the closure of the Strait of Hormuz affects 20 percent.

When the war first broke out, EU officials hoped the bloc would be spared from serious shortages thanks to its relatively low exposure to the Persian Gulf, which it relied on for just 6 percent of its crude oil and under 10 percent of its natural gas. The biggest risk articulated in countless ministerial and technical meetings was higher prices.

As the war enters its fifth week, those fears are being borne out. One immediate worry is that Asian countries, which before the war relied on the Gulf for some 80 percent of their gas and oil, are beginning to bid up the price of those products as they fight over dwindling supplies. That has diverted merchants with more flexible contracts toward Asia to exploit the higher profit margins, turning them away from Europe.

According to Charles Costerousse, a senior energy analyst at maritime consultancy Kpler, 11 Nigerian-flagged tankers carrying U.S. LNG have been redirected from Europe to further east in the past few days. Within the next few days, the last tanker bearing Qatari LNG will arrive in Europe, he said.

With almost all global suppliers at maximum capacity, European leaders are beginning to “realize that the LNG supplies they were counting on were not coming here as expected,” said Jaller-Makarewicz. “It's not like we have a buffer. It's not like we have some security there." Europe, she said, will start to feel the pain “this coming month” — perhaps within a few weeks.

“The very worst case is that the Strait of Hormuz remains closed for at least another month,” combined with further attacks on energy infrastructure, agreed an executive at a key LNG importer, speaking on condition of anonymity. The executive cautioned that the higher prices may in the long run support efforts to increase production, eventually rebalancing global supplies.

But even then, the executive warned, prices could remain structurally higher — perhaps forever.

The same holds true for oil products. While the EU buys very little crude oil from the Gulf, it relies on the region for more than 40 percent of its refined products — including diesel and aviation fuel. “If the strait remains closed there's basically no alternative options,” said Homayoun Falakshahi, an oil analyst at market research firm Kpler. Financial markets are betting the strait will be closed for only two or three weeks, he added. But if it “remains closed longer, we will see higher prices — and that will translate into a worse economic crisis.”

The benchmark oil price briefly dropped after rich countries agreed to a historic release of 400 million barrels of oil in early March. Since then, however, prices have only climbed back up.

The most immediate effect of constrained supply is already visible: higher prices at the pump. Rising crude oil prices translate directly to higher fuel costs. The Euro Super 95, a key benchmark for EU fuel prices, increased by around 15 percent between Feb. 23 and March 23, according to EU data.

European governments have tried to keep down prices, slashing fuel duties and warning against gouging. But unless new flows arrive, they’ll likely have to reach for an unpopular tool: demand destruction.

Already, EU energy chief Dan Jørgensen has advised EU governments, in a letter first seen by POLITICO, to curb the use of transport to offset the loss of critical diesel and aviation fuel supplies from the Gulf. The missive, with its hints of drive-free Sundays and gasoline rationing, harks back to the oil crises of the 1970s. Some are also warning that Covid-style “energy lockdowns” are approaching.

>>1503923
If Europe needs that strait so bad, maybe they ought to do something about it instead of expecting the American people to save their asses every time. President Trump is right about Europe, the American people are sick of footing the bill for their comfort! America First!

>>1503934
How are Europeans supposed to stop American war-mongering? Launch French nukes towards Washington?

>>1503923
FAKE NEWS. The French got a ship through the strait a few days ago and the other Europeans can also make a deal with Iran and just buy oil from Iran and Iraq that can be shipped through the strait

>>1503934
>do something about it
They are, they’re making deals with Iran as we speak. The US is sidelined, nobody is interested in this war and nobody can trust a thing the US administration says. Europe are also ready to defend Greenland and all NATO allies are ready for war if Canada is annexed

>>1503940
>>1503942
Basically this, Trump has turned his war against Iran into the American version of the Suez Crisis.

>>1503940
If Europe betrays us by directly funding the war chest of America's greatest enemy, than I suppose President Trump is right to give NAFO the middle finger

tRump & Putin have just just checkmated in 3D chess.
Asia and then Europe has to buy Russian oil.
tRump flees to Russia and lives with a harem that clean his diapers 3x a day and gets a fake red button to blow the world up as many times as he wants.

>>1503948
>Vatnik not even being subtle

>>1503945
Except this isn't the same as the Suez Crisis at all and America is winning overwhelmingly

>>1503950
that's what this board should be renamed to: unsubtle shills

>>1503942
Israel will have its puppet wave sabres at Europe, but it won't make any allies

Trump is a genius, who could have thought choking on Israeli dick would cause Europe to stop supporting Israel. I hope he gargles Israeli dick for the next two years, and his kids keep gargling Israeli dick for their terms afterwards

>>1503934
The powerful US Navy cannot reopen the Strait but surely the FRENCH Navy can! Why? Because Trump said so, of course!
Also, did you even read the article?
>When the war first broke out, EU officials hoped the bloc would be spared from serious shortages thanks to its relatively low exposure to the Persian Gulf, which it relied on for just 6 percent of its crude oil and under 10 percent of its natural gas. The biggest risk articulated in countless ministerial and technical meetings was higher prices.
>As the war enters its fifth week, those fears are being borne out. One immediate worry is that Asian countries, which before the war relied on the Gulf for some 80 percent of their gas and oil, are beginning to bid up the price of those products as they fight over dwindling supplies. That has diverted merchants with more flexible contracts toward Asia to exploit the higher profit margins, turning them away from Europe.
Europe isn't particularly reliant on oil exports from the Persian Gulf, but as the global demand for fossil fuels rises, countries that depend heavily on those supplies (mainly asian economies) may attempt to get it elsewhere at a higher price, thereby causing a global energy crisis. This is why gas prices are going up, even in America.

>>1503953
Europe was turning against Israel already because of Gaza, the only two useful countries still supplying Israel are the UK and Germany and both of those are against public opinion

>>1503959
The Iranians are going to allow everyone except for the US, Israel, and the 5 GCC countries which are allowing the US to use their territory to launch attacks against Iran to ship through the strait. They’ve also today said Iraq can use the strait for free.
Iran and Iraq can increase production to somewhat cover for the shipping restraints, so it won’t amount to a 20% reduction in global supply, that is unless the Americans keep committing war crimes by bombing Iranian oil facilities

>US gas prices surge past $4 under Biden due to a war started by Putin
>"BIDEN IS DESTROYING AMERICA"
>US gas prices surge past $4 under Trump due to a war started by Trump
>"HOLY SHIT BASED, 5D CHESS! AMERICA FIRST!"
This is some advanced migger retardation.

>>1503968
>They’ve also today said Iraq can use the strait for free.
It's not up Iran, it's up to the insurance companies covering those ships.
If even a few ships manage to go down each month, that will be enough for them to rescind coverage of those boats if they try to traverse the strait.
Insurance companies are unironically killing europe.

awww, the shills are trying to sneak over and pretend they were always on the non-retarded side of the fence

>>1503972
>If even a few ships manage to go down each month, that will be enough for them to rescind coverage of those boats if they try to traverse the strait.
Literally what other choice to do they have? The nature of insurance companies is they can't pay out every single payout at once or they'll instantly go bankrupt. And the nature of these ships is they need insurance or no company would take the risk.

>>1503971
And the only rational people are the ones who oppose the Ukraine war and the Iran war.

>>1503971
The difference being the Obama regime started the war in Ukraine by funding a coup against the rightful government, meanwhile the US under President Trump is finally defending itself against 50 years of Iranian aggression

>>1503975
>Literally what other choice to do they have?
The alternative is that China, Europe and India eventually collapse from the lack of food and fuel.

>>1503977
don't you have a trench to die in, shameless russia shill

>>1503979
Just say you hate white people.

>>1503951
The British and French claimed the same thing

>>1503981
The British and French didn't have the most lethal military on the planet. Trump does, now that Hesgeth cleaned out all those incompetent and traitorous officers

>>1503980
but i love ukrainians

>>1503982
>most lethal military on the planet.
So if Iran is winning, Iran has the moster lethal military on the planet?

>>1503951
>America is winning overwhelmingly
Gas is over $4 and 40% of the Gulf's oil infrastructure is gone. Iran is currently raking in more money than ever from the Strait via their new toll system. How the fuck is that "winning"?

>>1503986
B-but our KD!

>>1503988
Us killing so much of their leadership is arguably a fucking self-goal because we not only kneecapped their anti-regime opposition (especially not after Trump admitted to fucking arming protestors) but it also ensured literally any successors or survivors have 0 reason to negotiate over the Strait because the only ones willing to negotiate were the ones we fucking killed.

>>1503986
I am good until gas hits $10-15 a gallon, then maybe I'll have to stop buying so many video games.

>>1503986
Briben and Obama had higher gas prices. You're just demonstrating what an economic genius Trump is when he can get cheaper fuel than the Dems despite fighting a war that Iran started

>>1503986
The strategic goal of the war was to distract from Donald Trump's child rape scandal.

>>1503986
>Iran is currently raking in more money than ever from the Strait via their new toll system
I thought they had all their water and power infrastructure threatened or destroyed?
And they are going to have all their bridges blown up on tuesday

>>1503972
>implying the israelis will now start bombing ships

>>1503993
Reminder Trump claimed their air defenses were demolished the same day they shot down 2 US jets. I'm starting to think maybe we shouldn't believe a fucking word he says.

>>1504002
No he didn't

Trump's going to announce a "several day pause to bombardment" this evening ahead of combat actions scheduled for tomorrow. The admin talking points I've seen are because Iran is acting in good faith and negotiating.

There's a bunch of obvious reasons (ie bombing civilian infrastructure will make fuel prices increase exponentially and it's a war crime that no one in the admin really wants to chance doing) but the non-obvious one is so admin members can dump oil futures holds at this high price ahead of the announcement. If you have a QuikStrike account or Open Interest access you should be able to see the volume movement ahead of the announcement. Should let you time your sell if you're holding energy futures.

>>1503934
What exactly would you have them do that the US navy can't?
Plus is it surprising that they aren't too hot on being dragged into a war that the US allegedly didn't even tell them about in advance?

>>1504010
They’ve already bombed loads of civilian infrastructure and don’t seem to be concerned about war crimes. Hegseth literally said “no quarter”, although I’m not sure he knows what that means exactly, nevertheless that’s what he said.

>>1503980
>Russians
>White

>>1503992
the truth

>>1504117
They can still pretend that was all 'fog of war'. trump is now saying he is going to intentionally target civilians and commit genocide. That's as smoking a gun as you can get for war crimes if he actually goes through with it.

>>1504162
Yeah true. The problem with talk is that your opponent can take your word for it. suppose a man goes around telling people he’s going to kill them it’s logical to take measures against him so he doesn’t kill you, it’s illogical to do nothing against a threat. Suppose the murder man says I’m going to kill you tonight at 8pm, you now have until then to stop him and only a fool waits to find out if he is your death or just a liar

>>1504169
This is less how Iran will react and more how easiy it will be prosecute Trump for war crimes at the Hague. Assuming he doesn't stage a coup and the democrats don't elect yet another limp dick moderate who let's his republican predecessor's crimes go like the last 3 have.

>>1504172
Agree with you Iran won’t do anything other than wait and then call Trump a liar if he doesn’t do it or a maniac if he does. Either way Trump will be weaker. I don’t know what’s going to happen tonight, maybe something which Trump can claim fulfilled his threat

>>1503951
if by 'winning' you mean having absolutely zero effect on Iran's ability to attack infrastructure in the gulf and cities in Israel, and inciting them to blow up everything they can reach, then yes, Trump is 'winning'

US objectives:
regime change in Iran: different face same system FAILED
knock out Iran's ability to attack countries in the gulf and middle east: FAILED
open the straits of Hormuz FAILED
knock out Iranian nuclear program: possible success, but then again maybe the US and Israel hit decoy sites while the work is being carried out in underground installations 500 feet under the Zagros mountains